The Houston-area housing market saw gains for the fifth consecutive month in February as buyers closed on 4,933 single-family homes. But it continues to take longer to sell those homes.
Sales last month were up 4 percent over the same period a year earlier, a report says. Yet each sale, on average, took longer than it did in the previous month and in every other month for more than the last three years.
To be sure, the uptick in what real estate agents refer to as “days on market” is slight. It took an average of 66 days to sell a house last month, compared with 63 during February 2016 and 60 in 2015, according to data released Wednesday by the Houston Association of Realtors. And days on market is still below the long-term average of around 78 days.
Jerry Auippa is feeling some anxiety because his house in Katy has been on the market for seven weeks. The one-story home with four bedrooms was built five years ago and is on a quiet cul-de-sac in the upscale Firethorne community. The large kitchen is filled with upgrades and there’s a covered patio in the back.
Auippa said he priced the 2,300-square-foot house below what new ones like it are selling for, yet he hasn’t had any offers, even after holding open houses and dropping the price by $5,000.
“I was hoping to at least have some offers we could consider within three or four weeks,” he said.
Auippa is anxious for another reason: He has a contract on another house closer to his job in north Houston, but it’s contingent on the sale of his Katy home, which is listed for $264,900.
Inventory of housing for sale has shot up in some parts of town that are home to high concentrations of oil and gas workers, thousands of whom were laid off during the bust.
The Woodlands, the Energy Corridor and the Fulshear area all have seen slowdowns across the board, with fewer sales and lower prices while inventory and days on the market are up, Realtors Association data show.
“In certain areas it’s slowed down a little bit because a lot of people in oil and gas have been displaced,” said Michael Pulaski, Auippa’s agent.
Pulaski said some homes are still selling fast, but they’re the ones priced “to get a really quick sale.”
“They’ll take a bit of a break on what they’re going to get, but they’re going to get a quick sale,” Pulaski said. “We hadn’t seen that before.”
Among Houston’s eastern regions, where a petrochemical boom has fueled growth, housing markets in Texas City, Baytown and League City are still experiencing gains.
Though the temporary construction labor used to build those plants is falling off, there are still people who will need to run the facilities permanently, Houston economist Patrick Jankowski said.
“That’s a hidden gem that’s going to be paying dividends for Houston for years,” he said. “Those plants are not going to pack up and move to China.”
Jankowski said the high-rise condominium market, while just a small segment of sales, is more troubling.
That high-end market had a 10-month supply of units for sale in February, up from 7.8 months the year before.
“We’re overbuilding everything in the broad multifamily category — rental and condo,” Jankowski said.
Areawide, single-family home sales have gotten stronger in the higher price ranges while sales of properties selling for less than $150,000 are down, largely due to a lack of supply.
Luxury homes of at least $750,000 saw their fourth consecutive month of positive sales in February, according to the association, which tracks real estate transactions through the Multiple Listing Service primarily in Harris, Fort Bend and Montgomery counties. The median price of a home sold in February was $220,000, up 7.3 percent over last year.
Inventory was flat compared with January. Based on recent sales activity, it would take an estimated 3.5 months to sell all of the homes on the market, indicating an environment generally favorable to sellers.
“We need housing inventory to grow a bit more than it has, but we still believe the Houston real estate market is experiencing sustainable sales levels as we wrap up the first quarter of the year,” HAR chairwoman Cindy Hamann said in a statement.
Rising mortgage rates haven’t caused an appreciable change to the market, though they have spurred some to buy perhaps earlier than they had been planning.
Homebuilder Eric Lipar said in an earnings call this week that he’s seeing interest rates as much as three-quarters of a point higher than before the presidential election.
“So far, over the last 60, 90 days, we have not seen a negative impact in demand or sales,” said Lipar, CEO of The Woodlands based LGI Homes. “I think that the increase in interest rates are being offset by positive things happening in the economy, and it feels pretty good.”
Sales of townhouses and condominiums — not including high-rises — spiked 17.1 percent in February with 486 properties selling during the month. The median price of $162,000 was up 8 percent over last year. Inventory grew to 3.8 months from 3.3 months a year earlier.
In line with lower overall apartment rents in the city, single-family rents were down as well. Compared with February 2016, the average rent for a single-family home fell 2.1 percent to $1,652, while the average rent for a townhouse/condominium was off 3.5 percent to $1,478.
Still, the number of new single-family leases were up 8.5 percent. Townhouse/condominium leases were flat.
Realtor Pulaski said home sales are steady, but buyers are a little slower to pull the trigger.
“As a buyer,” he said, “you’re in a better position than you were a while ago.”